Fluor Announces Positive Q1 2025 Results
Fluor Corporation, a global engineering and construction firm, has released its financial results for the first quarter of 2025, providing insights into its performance and strategic direction. Jim Breuer, the chief executive officer of Fluor, expressed optimism about the company’s future, stating, “We are well positioned for the grow and execute chapter of our Building a Better Future strategy. As we continue to deliver on our projects and take in quality backlog, we see substantial opportunities for growth in our key markets. Our businesses are focused on organic growth and our core competencies will deliver results that support our customers’ needs. Today, more than ever, clients can rely on Fluor’s project delivery expertise to help navigate the complexities of the market.”
First Quarter 2025 Financial Performance:
Fluor reported a revenue of $4.0 billion for the first quarter of 2025, marking a 7% increase compared to the same period in the previous year. However, the company recorded a GAAP net loss attributable to Fluor of $241 million. This loss was significantly impacted by equity method earnings, which included a $477 million mark-to-market loss on Fluor’s investment in NuScale Power Corporation, a company focused on small modular nuclear reactor technology. Partially offsetting this loss was a positive adjustment of $84 million, reflecting the settlement of a claim related to an infrastructure project completed over twelve years ago.
Despite the GAAP net loss, Fluor’s adjusted financial metrics showed positive trends. The company’s adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) for the first quarter was $155 million, representing a substantial 76% increase year-over-year. Similarly, the reported EPS (Earnings Per Share) was ($1.42), while the adjusted EPS stood at $0.73, indicating a robust 55% increase compared to the first quarter of 2024.
Fluor’s consolidated segment profit, a non-GAAP measure, reached $131 million in the first quarter, up 11% from the $118 million reported in the corresponding period of the previous year. The company’s cash and marketable securities remained strong at $2.5 billion at the end of the quarter, providing a solid financial foundation.
General and administrative (G&A) expenses saw a significant reduction, falling to $36 million in the first quarter, a 39% decrease compared to the previous year. This decline primarily reflects a reduction in performance-based compensation expenses.
Operating cash flow for the first quarter was ($286) million, compared to ($111) million in the first quarter of 2024. This decrease was attributed to increases in working capital requirements on several large-scale projects. However, Fluor maintained its full-year 2025 operating cash flow guidance of $450 to $500 million.
New Awards and Backlog:
New awards secured by Fluor in the first quarter totaled $5.8 billion, a 17% decrease compared to the $7.0 billion in new awards in the first quarter of 2024. Notably, 87% of the new awards were reimbursable contracts, which typically carry lower risk profiles. Significant new awards included a multi-billion dollar Engineering, Procurement, and Construction Management (EPCM) award for a pharmaceutical facility in Indiana and a $682 million contract for the State Highway 6 construction project in Texas, both falling under the Urban Solutions segment.
Fluor’s total backlog at the end of the first quarter stood at $28.7 billion, with 79% being reimbursable. This represents a 12.3% decrease compared to the $32.7 billion backlog reported a year ago. The backlog associated with legacy projects continued to decline, reaching $585 million, a 53% reduction year-over-year, indicating progress in resolving older, potentially riskier projects.
John Regan, chief financial officer of Fluor, commented on the company’s financial health and outlook, stating, “Today we are on a much more solid footing financially, supported by a majority reimbursable backlog and a robust outlook for cash generation. As we transition to supporting growth in the business over the next strategic planning period, we aim to enhance operating margins through project execution excellence, lean processes, and risk management discipline, all while maintaining our commitment to return capital to shareholders.”
Outlook:
Fluor stated that it would not provide forward-looking guidance for U.S. GAAP net earnings or U.S. GAAP earnings per share, nor a quantitative reconciliation of adjusted EBITDA or adjusted EPS guidance, citing the difficulty in predicting certain components without unreasonable efforts.
Despite increased economic uncertainty, based on its current assessment of its backlog, segment performance, and the economic environment, Fluor reaffirmed its adjusted EBITDA guidance for 2025 of $575 to $675 million and adjusted EPS guidance of $2.25 to $2.75 per share. These estimates assume a tax rate of 30 to 35 percent and exclude items similar to those outlined in the reconciliation table provided in the earnings release.
Business Segment Performance:
- Urban Solutions: This segment reported a profit of $70 million in the first quarter of 2025, compared to $50 million in the same period of 2024. The improved results reflect the increased execution activities related to new awards secured over the past eighteen months, particularly in the life sciences and metals sectors. Revenue for the first quarter increased significantly to $2.2 billion from $1.5 billion a year ago. New awards for the quarter also increased to $5.3 billion from $4.9 billion, including the major pharmaceutical facility project and the Texas highway construction. The ending backlog for Urban Solutions grew by 8% to $20.2 billion compared to $18.6 billion a year ago.
- Energy Solutions: The Energy Solutions segment reported a profit of $47 million in the first quarter, down from $68 million in the first quarter of 2024. This decrease was attributed to projects nearing completion and a reserve related to a long-completed project at Fluor’s joint venture in Mexico. Revenue for the quarter decreased to $1.2 billion from $1.4 billion a year ago due to reduced execution activities on several projects nearing completion. New awards in this segment totaled $315 million, compared to $716 million in the first quarter of 2024. The ending backlog for Energy Solutions was $6.2 billion, down from $9.3 billion a year ago.
- Mission Solutions: This segment reported a profit of $5 million in the first quarter, a decrease from $22 million in the first quarter of 2024. The results were impacted by a $28 million reserve stemming from a recent ruling on a long-standing claim on a project completed in 2019. Revenue for the first quarter saw a slight decrease to $597 million from $601 million a year ago. New awards for the quarter totaled $164 million, compared to $1.1 billion in the first quarter of 2024.
Overall, Fluor’s first-quarter 2025 results reflect a mixed picture of revenue growth alongside a GAAP net loss influenced by external factors. However, the company’s adjusted profitability metrics showed significant improvement, and management expressed confidence in its strategic direction and future growth opportunities within its key markets. The focus on reimbursable backlog and disciplined project execution is expected to support the company’s financial performance and shareholder returns in the coming periods.
